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Our mission is to foster the improvement of New Zealand's democratic system and encourage the use of direct democracy through the

Veto, Citizens' Initiated and Recall referendum.


Wednesday, 16 June 2010

Economic Prostitution

By Steve Baron

Many years ago I walked into the Dept of Social Welfare. I didn't want the dole, just help to find a job.

I was interviewed by this scruffy slob of a bloke who got me to fill out a form
which also asked what jobs I would prefer. I listed Prime Minister and Minister of Finance, trying to show a sense of humor and motivation. He ripped the form apart and stormed out of the room in disgust. I yelled a few obscene words at him like... Quantitative Easing, Dead Weight Loss & Fiscal Deficit. This bought a gasp from the lady behind the counter who was amazed at my comprehension of economic language!

Well I certainly wouldn't want to be PM but Minister of Finance still appeals. I often wonder what English and his predecessor Cullen dream about at night, perhaps Margaret Thatcher? Cullen was so tight he needed an anal stretch and English so greedy he would charge his own Mother rent if she came to visit.

It hasn't been easy for English, the way the world economy has gone. Its not easy striking a balance between spending and debt. An increase to GST and the minimum wage is currently being mooted. GST is certainly a more equitable tax system, but as for increasing the minimum wage I can't agree. It creates what economists call a 'dead weight loss' which leads to unemployment. Raising the minimum wage is great for those who currently have a job but it adversely affects the uneducated unemployed trying to get a job. Put it this way, I'd rather see my child earning less than the current minimum wage, than being on the dole earning just over $100 a week.

One of the main problems challenging our economy is compounding debt. This happens because our money supply is created and owned by foreign financial institutions and then gets lent into our system at interest. We must make huge interest payments and pay twice over for infrastructure, health and education which society needs to improve our standard of living. Compounding debt cheats society.

If society needs more money to expand then an independent National Credit Authority should oversee the supply of it, not borrow it from overseas. Of course there has to be a happy medium. Supply too much and you get hyperinflation like Hitlers Nazi Germany. Supply too little money and the consequences are no more favorable. The
principal and the concept are important here.

The problem of compounding debt must be fixed before overseas financial institutions hang us by our antipodes. As Thomas Edison once said,

“If our nation can issue a dollar bond, it can issue a dollar bill. It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency.”

Anything else is economic prostitution. Henry Ford added,

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

Steve Baron is an author, Founder of Better Democracy NZ, and a
regular contributor to publications throughout New Zealand. He
resides in Cambridge.



Rusty Kane said...

If you didn't want the dole.. then you shouldn't go to Social Welfare.. you should go instead to prospective employers... Social Welfare is what it's name implies.. I'd rather you be earning a honest wage, in a real job than being bludger on the taxpayer funded dole. Social Welfare should only be for those who can't work or are unemployable to work... For others like single mums and dads that are pregnant or have young children at home.. Should be entitled to Work Leave Payments up to two years...
Social Welfare can be managed better...

Foreign financial institutions that are not managed and monopolise the markets are the big problem.. The same foreign financial institutions that lend us (NZ) the money at interest and own our compounding debt.. That we pay twice over for to maintain our standard of living. social welfare infrastructure, health and education.. the same foreign financial institutions who falsely monopolise the economy by price manipulation..That is the economic prostitution Henry Ford is talking about... If New Zealand had just lived within its means it would not have been tied to the worlds economic prostitution... the World's Biggest Fraud!. Price manipulated paper stocks & bonds and paper money.. That some are now saying will result in the failure of paper money, and the resulting collapse of commerce and world trade risks sending the entire world into a severe depression that risks famine on a world scale unlike what has ever been seen before in world history, and could therefore cause the direct deaths of anywhere up to a third of all humans on earth, or even more. For New Zealand the more we depend on imports and the the more money we borrow the worse it gets... A physically responsible government would have put in place measures and made the hard decisions necessary for NZ to be debt free.

Geoff Mctague said...

All healthy family units and social structures are based on social welfare. So a question, where does money come from?

My experience teaches me that many professionals have a very poor understanding of the fundamentals and only implement learned behaviour at the accounting level and repeat unproven theories.

Is money a man made myth? There is no doubt that if we all succeed at the money game the monetary system will fail. Not just become damaged as with interest laden debt.

Are there errors within the current economic theories? Perhaps the theories achieve what they are designed to achieve?

Certainly few who are in a position to challenge the theories seem interested in examining the ongoing problems associated with the potential for conceptual delusions about the monetary theories. It is almost as if to talk the truth will break the bank.

Yet it is unlikely thousands of years of evolution took place for the human race to starve to death just because it ran out of money within a few hundred years of its introduction.

Perhaps mothers and farmers have been made dependent on the banks and the political infrastructure that supports them.

While the reality is that without the mothers and the farmers money is of little use, food and nurture are far more important.

Steve Baron said...

In those days Social Welfare WAS where you went to get a job.

As for Geoff's comments, about professionals having a poor understanding of the fundamentals is a very vague comments that is unsubstantiated and adds little to the argument. Not that I could fathom what your argument actually was Geoff.

My experience, having studied Social Credit economics as well as traditional economics is that Social Creditors need to become more educated on traditional economics to gain more understanding and credibility. I hear far too many extreme and uninformed opinions and views of traditional economics that are simply not correct.

Geoff Mctague said...

A significant reason for many system failures is the poor understanding of at least one fundamental principle involved. Initially such a problem will lead to a poor understanding of the consequences, yet eventually the consequences become obvious.

As we head unavoidably towards another fruitless election people must pray, yet again, that they pick an economists from the limited selection who can deliver the right economic mix for future prosperity. The grandchildren depend on it.

I understand the fundamental requirement of any economy is the economic and efficient use of resources by the society for the benefit of that society.

Our current economic practices are based on loss, yet the money supply grows. therefore loss creates growth. Now I know how to do cleaver things with imaginary numbers but nothing that cleaver. A system that is run on loss performs as if it has gain? That is the equivalent of a car filling up with petrol because it is being driven down the road.

No doubt if I was a politician in charge of our money based economy I may feel a slight tendency to nudge things a little in my favor and make myself look good in front of my friends, even help them out a little.

Over a short period of time money theory has moved from money being a measure of the value of an asset to money being the value of the asset. And the money can exist separate from the asset such that the asset can be retained and the value spent as in revolving credit. I am sure it all makes a lot of sense when the fundamentals are ignored and the gains are accumulating.

For money to work in our economies special administrators need to be paid lots of money. And when the system fails, and it fails, the administrators need to be paid lots more money to fix it. And the fix is more loss.

So were does all the loss go? Does China really almost own America? Is a war the best solution to rebalance the books? Do we need to understand the fundamentals to get it right? Certainly not if it is not desired to get it right. Perhaps there is benefit in not getting it right.

Social welfare is there to give money to people who do not have any. It appears that a fundamental requirement of a money based economy is that people are dependent on money.